June 12, 2012
Mish's Daily
By Mish Schneider
Indeed Friday caught us by surprise-because it defied logic based on the technical analysis we do each and every day. So, although not happy about a 140 point drop, at least in the Vulcan world of trading, logic is restored. The 5/29 high became a distant memory after an initial pop above. Now, S&P 500, NASDAQ 100 and the DJ Industrial Average are about to test their fast moving averages. All in strong warning phases except the weak sister Russell 2000, which went back into an unconfirmed Distribution Phase.
S&P 500 (SPY) 10 DMA 131.05 to hold. Then 130.
Russell 2000 (IWM) Let's see what happens at 74.65
Dow (DIA) 123.40 the fast moving average to hold then we have 122.75 the 200 DMA
NASDAQ 100 (QQQ) Bearish engulfing pattern. But some might say a right shoulder forming on an inverted head and shoulders potential. That means once the shoulder low 60.75 breaks, could seal the fate. At least down to the 200 DMA or until more FED talk.
ETFs:
XLF (Financials) 13.80 (recent low 13.70) is the number to hold. Would have loved to see it back over 14.30. My original analysis this year was that no rally would be sustainable unless the financials firm.
IBB (Biotechnology) Been writing about the topping action since end of last week and now, it broke the 50 DMA.
XRT (Retail) Also showed some topping action last week. Under today's low and the 200 DMA is next
IYR (Real Estate) 60.00 is support. Needs a close over the 50 DMA for any chance of a recovery
Every day you'll be prepared to trade with:
